Question Details

Which one of the following would not be considered a liquidity ratio 


1. Pine Hardware Store had net credit sales of $6,500,000 and cost of goods sold of
$5,000,000 for the year. The Accounts Receivable balances at the beginning and end of
the year were $600,000 and $700,000, respectively. The receivables turnover was
a. 7.7 times.
b. 10.8 times.
c. 9.3 times.
d. 10 times.
Use the following information for questions 2-3.
Winslow Department Store had net credit sales of $16,000,000 and cost of goods sold of
$12,000,000 for the year. The average inventory for the year amounted to $2,000,000.
2. Inventory turnover for the year is
a. 8 times.
b. 14 times.
c. 6 times.
d. 4 times.
3. The average days in inventory during the year was
a. 91 days.
b. 61 days.
c. 46 days.
d. 26 days.
4. Which one of the following would not be considered a liquidity ratio ?
a. Current ratio
b. Inventory turnover
c. Quick ratio
d. Return on assets
5. Asset turnover measures 
a. how often a company replaces its assets.
b. how efficiently a company uses its assets to generate sales.
c. the portion of the assets that have been financed by creditors.
d. the overall rate of return on assets.



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